Contract Mfg. Roundtable Part 2

The main page for the entire Roundtable is available here.

Contract Manufacturing Roundtable Part Two:

Has the full implementation of the federal GMPs impacted your business in terms of competition? Do you expect to see greater impact on sector quality?

Provenzano: I think that the GMPs have considerably leveled the playing field. Were no longer competing with companies that were operating out of their basements or garages because they did not have the ability to become compliant. Since we have a sterling reputation for being the leading nutraceutical manufacturer in the industry, many of the individuals and companies that were working with these non-compliant manufacturers came to us and we are now manufacturing their products.

Ishaq: Yes, the full implementation of the federal GMPs impacted our business as the non-compliant manufacturers have been ruled out from the industry. After implementation of these GMPs, the quality sector has greatly improved and people are focusing more awareness towards the quality of the product.

Neal: As the GMPs start to take a stronger hold over the coming months, the number of manufacturers will start to decrease, which will allow for healthy competition amongst the manufacturers that deserve to be in business. It is difficult in any industry to compete against the companies that dont care as much for quality and service and can only win on price. Price is important but it is not everything.

Fox: We were compliant long before the FDA-mandated deadline so in the past we were often more expensive than many of our competitors; however with the GMPs now fully in effect we have seen many of our competitors prices increase in order to pay for all the improvements they have had to make to their operations. We fully expect to see an increased emphasis put on quality and an increased desire to deal with certified contract manufacturers.

Holtby: The nutraceutical industry has been gaining strength for several years and has become one of the largest industries in the world, but there have always been questions regarding quality of the products on the shelf. Although the FDAs big move on the GMPs has created a big shift in focus for the industry, it seems to have had a much larger effect on the manufacturers and marketers as compared to the retailers and consumers. GMP compliance will help the dietary supplement industry build trust with consumers. We expect that only the high-quality manufacturers will still remain in business after FDA audits, which is a great thing for the industry and the consumer.

Contract manufacturers face the challenge of growing the business and keeping up with regulatory issues. In order to anticipate the future needs of customers, contractors need to be proactive. With the advent of the new FDA GMPs for dietary supplements, contract manufacturers must advise customers of the implications of the new regulations. It is important to have formal training programs in place to ensure that personnel have a thorough knowledge of GMPs and SOPs and follow them. Record keeping and documentation are crucial components to ensure GMP compliance and continued certification. Complete and detailed batch records need to be maintained for traceability purposes.

As a contract manufacturer, weve definitely seen the majority of our customers become more aware of and demand compliance with the current GMPs. In fact, some of our customers require us to undergo periodic internal and third-party audits to confirm GMP compliance. However, weve always been a proponent of GMP compliance for several years; even before 21 CFR 111 went into effect for our company. Our customers have always been supportive and satisfied with our participation with regard to the GMPs.

The costs for FDA GMP compliance is a factor for increasing prices of products.

Kaufman: We take this new GMP very seriously and we see that our customers and FDA take it seriously as well. We believe that there will be a cost impact for all in involved and time will be the best indicator on the effect for all of us in the industry.

Archer: It has been and will continue to weed out the cheaters, although the process will take years to get everyone compliant and inspected.

Allison: There is no doubt that the sector quality will improve. We will also see fewer, but more highly qualified, manufacturers.

Stueber: Its a costly undertaking to be compliantone that not all manufacturers will have the financial backing to follow through with; but, Century Foods has and will continue to exceed future regulations.

Sysler: The implementation of the federal GMPs has impacted us positively. It is a requirement for more companies today that their manufacturers be third-party certified. We meet that requirement with the NSF certification. Even with the additional burdens on us from the GMPs, we find that we continue to be competitive in our pricing. And as long as all manufacturers are on the same playing field, the quality of products will continue to improve and the pricing should remain competitive. Our edge is the experience and service we provide.

Koon: Yes. We have getting many more inquiries about our services, from potential customers who are looking for compliant manufacturers. We have seen an increased demand for quality servicestesting and documentation.

Akand: The implementation of FDAs GMPs and the compliance requirement did not come as a surprise. We have been anticipating dietary supplement GMPs for over a decade. Indeed, in the last ten years, we have invested millions of dollars in our GMP infrastructure (e.g., technical affairs personal, laboratory expansions, and equipment and instrumentation). As such, we compare ourselves to other like-minded contract manufacturers that have also invested in GMP compliance. Firms that have made such investments have similar price points and lead-times; firms that have not are much cheaper and produce product quicker. Once the first round of West Coast FDA inspections occur, the gravity of the FDA GMPs will likely force additional firms to either comply or discontinue operations. Naturally, we anticipate fewer firms that are more capable, ultimately leading to greater credibility for the dietary supplement industry.

Paternoster: When I established NSP in 1997, from my experience in working in the OTC drug manufacturing business, we were essentially running our business already in compliance with Part 111.

Majeed: This is all that anyone can hope for, that quality and safety will rise above anything else. We do believe that a lot of companies are straightening out, as they understand the need and importance of the mandates. We dont believe it will perfect everyone out there, but it should certainly take care of those that are not willing to play by the rules.

What certifications do you hold (i.e., kosher, organic, NSF/USP GMP) and how have they helped you position your company with current and potential clients?

Provenzano: Our laboratory was GMP certified before it was mandated by the FDA. We also have organic certification and our warehouse is GMP certified through NSF. Furthermore, we are in the process of becoming TGA certified. Having these certifications certainly gives us a competitive advantage because it proves that we are a legitimate organization and not a fly-by-night that is going to take your money and run.

Ishaq: We hold NSF cGMP certificate as well as Processed Food Registration, Drug Manufacturing license and a Pet Food Production License from State of California. These credentials greatly help to build confidence and satisfaction on the customers that their products are manufactured in a highly cGMP audited and certified manufacturing facility.

Neal: We hold a number of certifications. We are GMP, kosher certified, Halal certified, certified organic through QAI, and both NSF and NSF for Sport. Certifications are important as they broaden our customer base and allow us to partner with customers that want to focus on niche markets within the supplement industry.

Cairo: We have kosher, organic and SQF certified facilities available that meet our customers individual needs.

Mihalik: We are kosher, NSF, NSF GMP for Sport and Australian TGA certified. We would not be eligible to manufacture many of the products we supply if we did not hold and maintain these certifications.

Holtby: We have obtained GMP registration through NSFs Dietary Supplement Certification program and the Natural Products Association (NPA) and have held these certifications for many years prior to the emergence of the FDA GMPs. We have also gone an extra step and are certified through NSFs Athletic Banned Substances program, also known as GMP for Sport, which means that our products will not contain any ingredients that might be of concern to professional athletes with regard to drug testing. We feel that maintaining these certifications ensures that all of our processes continue to be current with, and exceed, standard regulations in the industry.

Kaufman: Paragon Laboratories is certified by NSF/ GMP, NPA/GMP and QAI for organic, and we produce kosher certified products.

Archer: Our certifications include Informed Choice, USDA and Montana food manufacturing licenses. Informed Choice is the strictest standard and is the only standard that can guarantee a completely non adulterated product.

Allison: We currently hold certifications for kosher, NSF and NPA GMP, and halal.

Waege: We have kosher, organic, grade-A dairy, EU approved plants, SQF2000 Level 3 certifications, and are 21CFR110,111 compliant. These certifications are a few of the many reasons Century Foods is a leading manufacturer within the food, beverage, dairy and nutraceutical industries.

Sysler: Clearly the GMP certification from NSF International has helped us. We also provide organic extracts certified by QAI. That certification is a must with organic products. We are kosher certified by Kof-k. This is important to many customers, and most important in the food and beverage categories.

Koon: We currently hold NPA cGMP certified; NSF cGMP certified; NSF Sport certified; FDA Drug license; California Drug license; DEA license; Organic (Oregon Tilth); Halal (Infanca); Kosher (various). These certifications are significant for our customers and potential customers. It clearly shows our commitment to quality and in our ability when making products.

Akand: We are one of the most credentialed contract manufacturers in the United States. We are NPA GMP, NSF GMP, ISO 9001:2008, CCOF and QAI Organic, and ISNA Halal certified. Our myriad third-party certifications engender client confidence in our ability to formulate, manufacture, and delivery quality dietary supplements. Additionally, our organic and halal certifications enable us to cater to the specific needs of our clients.

Falkenstein: UAS Labs probiotics are manufactured in a NSF-GMP certified manufacturing facility, with strict quality control. There is transparency in the entire quality control process, which ensures customers are adequately satisfied with the quality of the product. The facility is also Kosher and Halal certified. And the contract manufacturing facility at APN holds Kosher (OK Kosher), Halal and NSF certifications.

Paternoster: We were one of the first companies certified by the NPA (NNFA) under its GMP program and we held that certification for six years plus passed an NSF customer audit. Our current position on certification is to be in compliance with the new FDA regulation (Part 111), which we have achieved and maintain with our QA/QC departments compliance program.

Majeed: At Sabinsa, many of the ingredients we use are Kosher and Halal, and many of them are manufactured at our NSF and ISO 22000 facility in India. In Utah, we have the GMP from the State of Utah, we have also recently received the IFS (International Food Standard) certification from Den Norske Vertias (DNV).

What are your current QA/QC initiatives, and how important is it to have established quality parameters?

Provenzano: Its imperative to have quality parameters in place. Not only is it our customers name on the line if something were to go wrong in the manufacturing process, but its ours as well. We take all the necessary steps though to ensure that the products we receive and ship out are of the highest quality. All of our QA/QC initiatives meet FDA and GMP regulations and we also have a secondary QC process in place prior to our products being shipped out. The fact that we go above and beyond to ensure quality is what sets us apart from our competitors.

Ishaq: QA/QC is the backbone of our organization; we have a highly educated and experienced QA/QC staff. Our lab is equipped with all necessary instruments so that products can be analyzed to meet quality standards and specifications. Our goal and initiative is to deliver our clients a superior quality product, free from contamination so that our customer will distribute a healthy product in the market.

Neal: We have spent years establishing our quality standards and continue to hone those standards on a daily basis. We always have new initiatives in the works. In this day, if you dont have quality parameters and standards in place you wont be in business much longer. Customers become more and more savvy and have higher and higher expectations and if you arent keeping up with those expectations and staying one step ahead you are in trouble.

Cairo: Quality is ALWAYS important, and if we feel our customers' expectations or parameters are not well enough defined, we will work with them to construct clearly defined parameters for the products we deliver. This includes signed 'Approved Supplier' lists and signed product specifications down to establishing microbiological limits of finished product.

Mihalik: Our quality system is not initiative based; rather, we believe in a culture of continuous improvement of our quality systems to maintain quality and GMP compliance. Established quality parameters that are relevant are critical to consistently producing a quality product

Holtby: We constantly monitor quality throughout every step of the manufacturing process. QA/QC initiatives follow GMP standards from the raw material to the finished product. Our SOPs are constantly maintained so that they are current, and produce an auditable paper trail. Within the last two years, SGTI. has automated many of the inspection and packaging processes with new, state-of-the-art equipment, including metal detection, for our customers ease of mind. Although costly, the equipment also makes our processes more efficient and improves our overall product quality.

Kaufman: In the last year we have doubled up on our staffing in the QC and QA departments. These departments are of paramount importance in assuring GMP compliance. Our quality staff meets with upper management regularly to move our quality initiatives forward. We have also committed major dollars into our QC laboratory.

Sysler: Our QC initiative is at the highest level in our company. This, along with quality and customer service, is our top priority. QC requires every ingredient coming in to be identified and reviewed for spec compliance. Each batch made is tested for spec compliance and micro tested. Each finished product is also tested based on customer requirements and micro tested. No product is released until QC finishes their testing (to the chagrin of the customer).

Koon: We are currently adding additional testing ability to our lab. We have hired more chemists and bought additional testing equipment. We have also increased our testing validations as well.

Akand: With the GMP compliance elements in place, our goal is to increase the efficiency of our technical affairs team through additional investment in equipment and facilities, and the adoption of lean management and operating principles.

Paternoster: We have a professional staff of QA/QC personnel, applicable SOPs, QC program required by Part 111 CGMPs, and in-house testing laboratory.

Majeed: We take this as one of the highest priorities here at Sabinsa. Nothing trumps this. From incoming raw material, be in Sabinsa ingredients or outside, to outgoing finished products, everything gets tested. Our procedures and policies thoroughly often and without established parameters, we feel the entire manufacturing output is inadequate.